eAuction - Get the lowest market price

The Scanmarket eAuction module will ensure you achieve true market pricing for any goods or services, regardless of whether the market itself is rising or falling. This kind of online negotiation can be utilized to streamline your procurement process, resulting in increased savings that reflects directly on your bottom-line. So not only will you save money on your products and services, you will save time as well - time that can be spent on creating more value for you, for instance sourcing for new suppliers.

Key benefits for you using eAuctions

• Time savings - an eAuction does not have to take longer than ½ hour, compared to a usual negotiation process that can take days

• Money savings - latest results show average savings compared to current prices from 15 to 18%

• Higher level of market transparency

• Enhances competition as most often more suppliers are included compared to a usual negotiation process

• Accelerates pace of collection and comparison of quotes

• Global participation on real-time basis

Pre-qualification is key to a successful eAuction

Before conducting an eAuction it is important to qualify suppliers. First of all this ensures that all suppliers invited to bid have the ability to provide you with the goods or services you want and have understood the product specifications. Moreover, it will provide you with knowledge about potential differences between the suppliers as well as the competitive level. This knowledge can be incorporated in the eAuction by utilizing parameters to transform bid values for a range of important factors as well as setting individual supplier start prices.

The pre-qualification can be conducted in the traditional "offline" way - or by using the Scanmarket eRFx module. If the pre-qualification has been conducted using the Scanmarket eRFx module, comparing supplier responses is extremely easy. Due to the seamless integration between the eRFx module and the eAuction module all information from an eRFx can be transferred easily to an eAuction - including all differences between suppliers and their RFQ bids.

Click here to learn more about how to utilize the eRFx module for pre-qualification.

Embedded Best Practices

Launch your auction using our pre-defined templates - you only need to fill in details of the products, supplier email addresses and of course time and date of the auction. The tool also allows you to create your own templates in addition to repeating the auctions already conducted; thereby establishing your own customized templates with your best practices and reducing cycle times. The pre-defined templates cover:

Reverse auctions:
In reverse auctions the supplier with the lowest price will win the auction. Available in different versions, Single Line, List, Cherry Picking and CherryLot - there is a reverse auction template for every need.

Forward auctions:
A Forward Auction is similar to a reverse auction, but bids go up instead of down, i.e. the bidder with the highest price or the highest discount will win the auction. Available in the same versions as the reverse auctions.

Dutch auctions:
A Dutch auction is characterized by the first come first served principle meaning that the first supplier to submit a bid closes the auction. From a pre-defined starting price, the auction price will at pre-defined time steps go up in pre-defined price steps - until a supplier accepts the price level. As the supplier can only see the current price step and the remaining time until the next price step a Dutch auction is a more psychological challenge for suppliers than standard reverse auctions. This auction type can be carried out with only one supplier, as the numbers of competitors are not visible to the suppliers.

Japanese auctions:
Contrary to a Dutch auction, from a pre-defined starting price, the auction price in a Japanese auction will at pre-defined time steps go down in pre-defined price steps. For each price step the suppliers must accept to remain active in the auction. After not bidding a pre-defined number of price steps a supplier will be excluded immediately for further participation. After the auction you will know exactly how low a price each supplier is willing to accept. This auction type can also be carried out with only one supplier.

Parameter/weighted auctions:
Parameter/weighted auctions are auctions which take into consideration more than just the price parameter - e.g. various currencies, qualities, payment terms, delivery terms, switching costs etc. For each parameter a formula is used to adjust the suppliers' bids in the auction. In parameter/weighted auctions any competitive information shown to suppliers, e.g. best bid or rank, is based on the adjusted values of all suppliers' bids.

Key features of the Scanmarket eAuction module

• Easy to use - for event manager as well as supplier

• Stakeholder role - collaborate on setting up and conducting eAuctions

• Spectator role - invite your colleagues to follow your eAuctions

• You can create your own templates and reuse existing eAuctions

• Several display options for you to choose - e.g. show leading bid, show ranking and show leading/not leading

• Long list of additional functionality - e.g. individual starting prices, proxy bidding, blindfolding of participants, reserved price indicator, link lines and partial quantity bidding

• Sealed bidding - ensures no access to bidding info until after the auction is over

• Flexibility - functionalities can be combined as you require

• eAuction settings can be altered during the event - e.g. display options, bid difference and extension unit

• Detailed audit log tracking all actions - ready for filtering and print

• 15 languages supported by the software

• Easy accessible electronic repository for all your negotiations

• High level of security is guaranteed

What are suitable eAuction areas?

Scanmarket has seen successful eAuctions across all industries - only your imagination sets the limit for the products and services that can be auctioned. Market competition is the key thing you need - the value of the purchase is usually a good indicator of the level of supplier interest in the business. To sum up the necessary conditions:

• Market Competition - Suppliers are ready to fight for your business
• Attractiveness of the order - the volume auctioned is sufficient to motivate suppliers to bid affectively
• Product Specifications - Products or services are well specified - by e.g. documents, pictures or product tests

The specially developed Scanmarket Suitability Analysis Chart can help you to define the level of market competition and product complexity - the buyer answers up to 15 questions about the procurement, and the chart provides a recommendation whether the category is suitable for an eAuction or not.

Click here to get an overview of the 10 most eAuctioned areas in 2010 and the achieved savings.

What to consider for use in public procurement?

Public sector spend awarded through eAuctions is rapidly increasing - the reasons being that eAuctions to a higher degree than ordinary tendering will ensure the buyer full control of the entire tender process while maintaining transparency, fairness and equal opportunities for suppliers. At the same time an eAuction conducted on the Scanmarket platform will ensure you full compliance with public procurement regulations, e.g. option to base result on most economically advantageous offer by including mathematical formulas and complete audit documentation.

Click here for a checklist on how to run eAuctions in the public sector.